SECTION 4. APPLICATION

For taxpayers within the scope of this revenue procedure, the Internal Revenue Service will not challenge the following positions:

.01 The position that the taxpayer continues to own the auction rate security upon receiving or accepting (or “opting into”) the Settlement Offer (but not after tendering the security).

.02 The position that the taxpayer does not realize any income as a result of receiving or accepting (or “opting into”) the Settlement Offer and does not reduce the basis of the auction rate security from its original purchase price.

.03 The position that the taxpayer’s amount realized from the sale of the auction rate security during the Window Period to the person offering the settlement (Corporation X in this revenue procedure) is the full amount of the cash proceeds received from that person.